Virender Pal Singh vs Central Bank Of India

This appeal is against the following order passed by the Tribunal below(DRT) in the appellant's Securitisation Application filed under Section 17(1) of SARFAESI Act whereby his application for interim relief was disposed of:-

"The present securitization application has been filed by the applicant praying therein to restrain the respondent bank / court receiver from taking the physical possession of the propertybearing no. F-267, Upper Ground floor, NewRajinder Nagar, New Delhi- 110060. (hereinafter referred as the property in question).

The facts of the case are that the applicant has taken the home loan of Rs 75.00 lacs, which was to be payable by way of EMI of 240 months of Rs. 74,900/- commencing from August, 2013. The applicant submitted that the applicant started making the repayment of the regular EMI till July,2016 and another payment of Rs.11,89,323/- was paid on 18.10.2016, but thereafter there was loss in the business, hence, the account was declared as NPA on18.10.2016 and the demand notice issued on 27.10.2016 and court receiver has been appointed for taking the physical possession of the property in question. Accordingly, it has been prayed for restraining the respondent bank/ court receiver from taking physical possession of the property in question.

On behalf of the respondent bank, detailed reply has been filed stating therein that the applicant has entered into settlement / OTS for a sum of Rs. 1.95 crores vide sanction letter dated 22.02.2018, and the said amount was to be paid within six months through two instalments alongwith interest @ 10% on reducing balance by 02.09.2018, therefore, the liability has been admitted by the applicant, but the applicant, but the applicant failed to make the payment as agreed in the OTS. Accordingly, the respondent bank was left not alternative, but to proceed further with the secured asset.

Further, it is also agreed on behalf of the respondent bank that there are three accounts and, at present around Rs.2.52 crores is due against the applicant and no amount has been paid as per OTS by 31.03.2018, therefore, no OTS stands exist on date and only a sum of Rs 20.00 lacs were deposited, which were duly appropriated. Ld. Counsel for the respondent bank further argued that a sum of Rs 62,73,035.04, Rs.1,18,51,353/- and Rs. 71,26,051/- are due in Housing Loan, M/s Lara Exclusive and M/s Twinkle Exclusive, respectively, therefore, an approximate amount of Rs 2.52 crores are due in all the three accounts. It is also being argued on behalf of the respondent bank that the applicant has not impleaded his own wife in whose name the property in question is existing, therefore, the present securitization application is not maintainable. Accordingly, prayed for declining the interim relief.

Heard and the record has been perused thoroughly. Undisputedly, there are three accounts i.e. housing loan, M/s Lara Exclusive and M/s Twinkle Exclusive wherein amount of Rs 62,73,035.04, Rs. 1,18,51,353/- and Rs. 71,26,051/- are due respectively in these three accounts. Though, OTS was entered into and the proposal was accepted on behalf of the bank, vide letter dated 28.02.2018, by which an amount of Rs. 175.50 lacs was to be paid within six months in two instalments of conveying the sanction of OTS proposal alongwith interest @10% on reducing balance and Rs.19.50 lacs was to be deposited as down payment, the amount of compromise was Rs.195.00 lacs. Though, the settlement letter dated 22.02.2018 was received by the applicant on 21.05.2018 as apparent from the signature of Viriender Pal Singh. However, the bank has contended that the applicant was well aware about the said OTA and the amount was to be paid by 31.03.2018 in view of letter dated 22.02.2018 issued by the respondent bank, which was received by the applicant on 03.03.2018 as per the version of the bank.

No doubt, two letters dated 22.02.2018 and 28.02.2018 are there, but both are contradictory in nature, wherein as per letter dated 28.02.2018, the amount was to be paid by 31.03.2018, whereas per letter dated 22.02.2018, which was stated to be received by the applicant on 21.05.2018 an amount of Rs 175.50 lacs was to be paid in six months through two instalments alongwith interest @ 10% on reducing balance. Apparently, the date mentioned as well as signatures of Virender Pal Singh on both the letters dated 22.02.2018 are totally in different handwriting, whereas in the letter dated 22.02.2018, under the signature of the applicant, the date has been mentioned by some other person and no postal receipts has been placed on record to show that the said letter was sent through registered post. It is the only contention of the applicant that time has to be reckoned from 21.05.2018and the said OTS amount has to be paid within six months through two instalments from 21.05.2018. Though the said period has to be counted from 21.05.2018 as prima- facie, the said letter was received by the applicant on 21.05.2018 but the said period to be expired on 20.11.2018. It is also undisputed fact that the upfront amount of Rs 20.00 lacs has already been deposited in the matter and it has to be proved on record whether, the said letter dated 28.02.2018 was actually received on 03.03.2018/ 21.05.2018 or not, which shall be proved by leading evidence by both the parties. Hence, prima-facie case has been made out in favour of the applicant but it is also a matter of fact that a sum of Rs 20.00 lacs has only been deposited till date admitted by the bank at the time of OTS. Therefore, it would be appropriate , if the applicant is directed to deposit with the respondent bank another sum of Rs 70.00 lacsand out of which an amount of Rs. 20.00 lacs to be deposited by 05.11.2018 and Rs 50.00 lacs on or before 20.11.2018, falling which, the respondent bank, through the same Ld. Registrar, shall be at liberty to take the physical possession of the property in question in accordance with the law. Till then the status quo be maintained qua the property in question subject to deposit the aforesaid amount by the applicant with the respondent bank.

List this case on 05.12.2018 for filing evidence by both the parties."

Feeling aggrieved only with the direction for payment of seventy lacs of rupees to the bank the appellant has filed the present appeal.

A perusal of the S.A. filed by the appellant shows and it was not disputed also from the side of the respondent bank that the appellant had approached the DRT when his housing loan account had been declared NPA and demand notice under Section 13(2) of SARFAESI Act was issued in respect of the housing loan account and not in respect of the other two accounts which also he was maintaining with the respondent bank. The learned DRT had found prima facie case in favour of the appellant for grant of interim relief against his dispossession from the house which he had mortgaged in favour of the bank while availing housing loan. The learned DRT however did not want to grant unconditional interim relief and so a condition was imposed for payment of Rs. 70 lacs to the bank. That much amount appears to have been directed to be paid considering the total outstanding dues in all the three accounts as if the appellant had filed the S.A. in respect of three accounts while in fact he had filed the S.A. only in respect of the measures under SARFAESI Act initiated in respect of the housing loan only. The outstanding dues in the housing loan account at the time when interim relief was being sought by the appellant were undisputedly less than Rs.70 lacs. Therefore, prima facie, the direction given to the appellant by the DRT for paying Rs. 70 lacs to the bank as a condition for grant of interim protection to him appears to be not justified.

The appellant has been enjoying the interim relief granted firstly by DRT and then by the Hon'ble High Court where the appellant had filed a writ petition and had raised a grievance that the DRAT while permitting entertainment of this appeal on a pre-deposit of 25% of the debt in question had not granted any interim relief before making of actual pre-deposit of 25%. Hon'ble High Court had held that DRAT can grant interim relief during the period given to appellant for making pre- deposit as no appellant can be left remedyless. Thereafter, this tribunal had continued the interim protection against the dispossession of the appellant from his house during the pendency of this appeal.

Learned counsel for the bank had submitted a serious grievance that the appellant had not cleared the bank's dues running into crores of rupees and so he should not be shown any indulgence by this Tribunal and in any case there was no justification to interfere with the discretion exercised by the DRT vide impugned order. However, this submission ignores the fact that the total dues under the housing loan account were less than the amount of seventy lacs directed by the DRT to be paid to the bank and so the said condition appears to be harsh and unjustified. It was also contended that if no money is paid to the bank by the appellant the entire purpose of SARFAESI Act would get defeated. This aspect certainly be taken care of by this Tribunal by suitably modifying the impugned direction for payment of some money to the bank also considering the fact that the appellant has made a pre- deposit of 25% with this Tribunal which amount has to go back to the appellant as per the judgment dated 22.04.2016 of Hon'ble Supreme Court in Civil Appeal No.4379 of 2016 "Axis Bank versus SBS Organics Private Limited and Another"

This appeal is accordingly disposed of by modifying the impugned direction and in the overall facts and circumstances the direction for payment of rupees seventy lacs by the appellant to the bank is substituted with a direction for payment of Rs. 15 lacs by the appellant to the respondent bank against in the housing loan account within two weeks. Subject to the compliance of this direction, which direction is being passed keeping in mind the legal position laid down by the Hon'ble Supreme Court in its judgment dated 07.04.2014 in the case of "M/s.Shreenath Corp.& Ors.Vs. Consumer Education and Research Society & Ors.,"(Civil Appeal No.9052/2013), interim protection against the appellant's dispossession from the mortgaged house will continue during the pendency of the S.A. The learned DRT should dispose of the S.A. as far as possible within a period of three months from the date of communication of this order. It is clarified that this appeal has been disposed of only on a prima facie view of the matter. The appellant will be returned the amount of pre-deposit of 25% which he was permitted to make for the entertainment of this appeal by pre-maturely encashing the FDR with up-to-date interest from the bank concerned.